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Inventory Tracking - A Means To Cost Reduction

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One of our challenges was tracking the inventory and ageing of the inventory in real time. While this was a limitation in our legacy system, Microsoft Dynamics ERP has helped us overcome this to a great extent by providing as and when information of the inventory level across all locations.



For instance, we manufacture thousands of SKUs in our units; today I am in a position to know what quantity of which particular SKU is lying in which depot at any given point of time. If a particular SKU is required at a particular depot, and the same is not available there; ERP can tell us the stock of the said SKU lying in other nearby depots – in real time. We can then transport the stock from the closest depot where the stock is available, instead of transporting from the factories – thus saving on transportation cost & time. This mechanism has been facilitated by ERP.

We are also able to get the ageing of the stock and track which material is new and which is old. However, we have not yet been able to exploit ERP to control inventory movement. Tracking & controlling movement of inventory within the warehouse continues to be a challenge, for the obvious reason that we don’t have enough space in our godowns wherein we can plan inventory and stock items batch wise & date wise.

We follow the FIFO (First In First Out) method for inventory movement, but it is done manually. If the material kept there seems old, we use it first; if it seems new, we use it later. We haven’t been able to utilize this feature of Dynamics ERP yet, because we have to have lot of space for this. Nevertheless, ERP has made our lives much easier and we hope to make the best of this functionality in future.

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